The number of fraudulent claims for federal income tax refunds has quadrupled over the past two years, and the Internal Revenue Service is stepping up efforts to combat the crime by introducing new screening procedures that flag questionable returns and refunds. The agency is also putting into place mechanisms that will make it more difficult for scam artists to file tax returns using the identities of deceased individuals or those who would not otherwise be expected file a tax return, said Steven T. Miller, Deputy Commissioner for Services and Enforcement at the IRS.

Kimberly Quillen/The Times-PicayuneMore than 600 accountants attended a tax conference put on by the Society of Louisiana Certified Public Accountants Thursday.

Miller addressed more than 600 accountants gathered at the Hilton New Orleans Riverside Thursday for the Society of Louisiana Certified Public Accountants' annual Tax Conference.

"We're not going to stop all refund fraud, but we're going to make a real dent in it this (tax) season," said Miller, who acknowledged that some of the new procedures the agency is implementing could slow down the issuance of refunds. He added that addressing refund fraud, which occurs when someone files an income tax return claiming a refund they haven't earned, is one of the agency's top priorities.

The IRS identified 2 million returns this year as being potentially fraudulent, up from 472,000 returns in 2009. Miller said the uptick in the number of fraudulent refund claims may partially be a reflection of the agency's ability to better detect them, but he said the issue is still a problem.

"It is stealing," he said.

Steven T. Miller, Deputy Commissioner for Services and Enforcement at the IRS, spoke Thursday in New Orleans

Refund fraud can include making an exaggerated claim for a refund, or claiming someone else's refund by stealing their identity. That later form of refund fraud, Miller said, is particularly pernicious because it not only cheats the government out of money but also ties up honest taxpayers who have fallen victim to identity theft.

The increase in refund fraud is linked to both an overall rise in identity theft and an increase in the number of tax credits that generate refunds. At the same time, the emphasis the agency places on issuing refunds as quickly as possible has sometimes made it difficult to catch fraudulent refunds before they go out, he said.

"The need for speed has become standard issue for our (agency's) culture. But that culture is beginning to shift," he said.

"We have to find a way to pick out and slow down the questionable refunds."

The potential scope of the problem is great because more than three-fourths of Americans receive refunds.

"We're a country of over-withholders," Miller said. The average refund is $3,000. And for many families, the federal income tax refund is the largest lump-sum payout they receive all year. It's also a payout that most taxpayers wait anxiously for.

The agency is taking a number of steps to crack down on refund fraud. Among them:

• Locking the accounts of deceased taxpayers whose estates are not required to file a final tax return, a move that eliminates the chance that a scam artist could assume the individual's identity and file for a refund.

• Working with police to obtain information on crimes involving stolen debit cards and Social Security numbers and then watching for returns filed using those accounts.

• Watching for sudden changes in taxpayer behavior that could signal that a person other than the taxpayer is trying to claim a refund.

• Devoting more staff to the examination of income tax returns filed by prisoners. Although many prisoners do have legitimate reasons for filing income tax returns, there has been an increase in the number of fraudulent returns submitted by prisoners in recent years.

The IRS is also increasingly focused on assisting victims of refund fraud, taxpayers whose identity has been used by a scam artist to obtain a refund. Since the victim's tax return is usually received after the one filed by the scam artist, "their refunds are held while the case is sorted out," Miller said.

The agency is trying to do a better job of more quickly determining which of the two refunds owed in such a case is the honest one. The IRS has also provided pin numbers to 250,000 known victims of identity theft that they can use when filing their returns to verify their authenticity.